SPI Podcast - Getting out of the Race to the Bottom
Ideas and solutions to help contractors escape the trap of competing solely on price.
Getting out of the Race to the Bottom, moderated by Chaolysti's Pam Cargill. In residential solar, competition is increasing across the US. Many contractors are responding by lowering their prices to win new customers, a tactic that could damage the health and longevity of their business. This podcast engages contractors with ideas and solutions that can help them escape the trap of competing solely on price. Listen in and learn from the real-world experiences of seasoned and successful solar and contracting professionals. By the end of this podcast, you’ll begin to define what operating as a healthy solar contracting business means for you on a day-to-day and long-term capacity.
Two questions for Pam and Boaz
Tom: Why did you choose this topic?
Pam: I chose this topic, getting out of the race to the bottom, because I know small contractors have struggled to compete with venure-funded residential solar companies and many have responded by lowering their prices. This has resulted in significant existential struggle for a number of those contractors since now they have to sell more to make the same net profit margin.
Tom: What jumped out for you from the dicussion?
Pam: Acquiring customers is still a top concern for contractors. Vincent, however, shared his diversification strategy (energy storage and micro-grids) that is helping him re-market to existing customers without expanding his geographic reach—a very wise choice.
Closely managing your brand—not just during the sales process but also throughout the customer journey, all the way through to long term relationship, needs to be the differentiator. Be genuine, real, and you. have real relationships with your customers. Honor your commitments.
Focus on your people and empower them. They will then do everything they can to take care of the customer.
Tom: Boaz, why is this an important discussion to have?
Boaz: The solar industry is going through some growing pains, which makes it pretty challenging for contractors to know where to focus their efforts. Falling prices, new types of competition, increasing technical complexity, and dealing with regulatory changes puts a lot of pressure on margins and the ability to sustain success. Working “on the business” is critical now, and this panel pointed squarely at the question “what is business health, and how do we achieve it?” That’s really one of the most important topics to explore today.
Tom: Do you have any big takeaways from the discussion?
Boaz: The solar contractors in the audience were clearly seeking to control their own destiny. For example, I heard from several attendees about their desire to reduce reliance on outsourced leads and “grow up” their own lead generation capabilities and web expertise. That was interesting and gratifying to see. I think organically growing a contracting business is essential to reducing soft costs.
There was also a theme of the panelists encouraging contractors to be themselves – that brand is driven by values, and that attracting, engaging, and retaining good employees depends on embodying those values with integrity. That is a great message to hear – it’s so fundamental to long-term business success in any industry.